Update and dilemma. . . .

Hey there folks!

Long time no blog!  This summer has flown by - I'm still working like a dawg, but I can sense that the end is nigh!

I now owe $29,318 on my student loans!!  Here's a more organized update (and then I'll explain my dilemma):

Here's where things stand now, in early-mid September 2012:

Second Mortgage Debt: $31,400::::$25,176

Student Loan Debt: $61,762::::$29,318

Primary Mortgage Debt: $167,500::::$154,209


Here's what it looked like in late May 2012:

Second Mortgage Debt: $31,400::::$25,442

Student Loan Debt: $61,762::::$39,070

Primary Mortgage Debt: $167,500::::$155,191


That second mortgage really needs to DIE, by the way.  The balance never goes down!

So here's the dilemma:  I find that with the current stock market (which is doing pretty well, all things considered) I could sell ALL of my stock and pay off ALL of my remaining student loan balance.  As in, TODAY (or, end of the week, assuming that kind of thing takes a few days).

I was intending to pay down my loans to $20,000 by January 2013 (totally doable) and then use $20K of the stock to pay the rest of it, thereby retaining about $8K for future use (or if I needed it to pay taxes).  Assuming, of course, that the stock market doesn't tank between now and January.

Psychologically, having a bit of stock left over makes me feel all warm and fuzzy inside, though logically I know that the stock is NOT going to gain 8.25% a month as my student loans do.  Or 8.9% a month as my second mortgage does. So the smart thing to do is pay the student loan off now, and take the tax hit this year  Since it's considered capital gains (I think), it would be 15% on the 'gain' regardless of how much other income I bring in this year (and I'm closing in on $100K this year so my income taxes will be high).  (BUT WAIT:  I just had a thought.  Since my student loan rate is 8.25% and the taxes are 15%, won't I pay more in taxes than I will in interest if I sell up now? ARGH!  Why didn't I major in Accounting or Finance?).

So essentially my logical self is battling with my emotional self about this.  I know what Dave Ramsey would say:  Sell now and get out of debt - then start on the second mortgage.  My new-to-saving self wants a little nest egg, though.

Also, and I don't think I've mentioned this, but I also picked up an auto loan in the last year.  My 15 year old beater finally bit the dust - I'm not worried about the car loan (2.9% interest) mostly because I bought a used, reliable, low-mileage, in-demand car that will keep its value for years should I choose to sell it.  And with my current extra income I can pay off that car loan in about 4 months.  No worries there. 

Anyhoo, here are my options as I see them:

• Sell ~ $28,000 in stock now and pay off all (or almost all) of student loan debt; would then need to spend the rest of the year saving for taxes;
• Sell ~ $20,000 in stock now and pay off almost all of student loan debt, using the rest of the year to pay the rest of it off.  Downside:  have to pay capital gains tax for 2012 when I'm already having to save for extra federal and state taxes;
• Pay down the student loan debt to $20,000 by January 2013 and then sell $20K in stock and pay the capital gains in 2013 when I may be making less money (and therefore won't have to save as much for my 'regular' taxes).

What would you do?

An update to celebrate the new year. . . .

Greetings! We we begin the new year, I wanted to update my debt repayment status. I've made a dent in my student loan debt, though it has come at the cost of my mortgage debt, unfortunately.

Even so, I'm happy with the progress I've made and am excited to watch my student loan debt decrease even more quickly in 2012. I can't imagine the relief that I will feel when this burden is removed from my life forever!

See my last post for my 2012 goals, while you're here!

Here's where my debt stands now, at the end of 2011:

Second Mortgage Debt: $31,400::::$25,763

Student Loan Debt: $61,762::::$49,438

Primary Mortgage Debt: $167,500::::$156,344

And here's where I was in mid-October:

Second Mortgage Debt: $31,400::::$25,888

Student Loan Debt: $61,762::::$51,881

Primary Mortgage Debt: $167,500::::$156,757

Clearly, my first and second mortgages are primarily interest payments, which is truly painful to see. I am hopeful that when my student loan debt is repaid, I can throw some extra money at these bills to ensure that they decrease more quickly than they have over the last year.

I hope to update more frequently this year, though can't make any promises given my hectic work schedule. Have a wonderful start to 2012!!

End of Year Wrap Up and 2012 Goals

Hello, and Happy Holidays, folks!


Whew! It's been quite a year; I have a total of four jobs (one full time, three part time) and am beginning to make a dent in my student loan debt. By the end of this year, I will have increased my income by over 70% (compared to my one full time job). My goal at the beginning of this year was to double my income, and while that didn't happen, I am pleased with what I've managed to achieve.

As a reminder, my goals for 2011 were:

• Attempt to double my income (from roughly $40,000 from the day job to $80,000 including all of my part time and full time income. With all four of my current jobs, I'll only make around $65,000 in 2011 so I need to add about $15,000 in additional income to get there);
• Related to the bullet item above, continue to develop my online teaching portfolio in order to bring in extra funds;
• Pay down my second mortgage to such a degree that I can sell my home in the spring of 2012;
• Continue paying at least the interest on my student loans.

Here's how I did:

• Attempt to double my income: I will gross around $73,000 this year, so I almost made it!
  
• Related to the bullet item above, continue to develop my online teaching portfolio in order to bring in extra funds: I picked up an online teaching gig that should hopefully continue into 2012 - I will continue looking for realistic opportunities to increase my work in this area.
  
• Pay down my second mortgage to such a degree that I can sell my home in the spring of 2012: I changed my tactic on this - instead, I am focusing on my student loan debt.
  
• Continue paying at least the interest on my student loans: See above. I have paid off over $10,000 of the principle balance on my student loans in 2011, bringing the total debt to (finally) less than $50,000!! It hasn't been this low since before I finished graduate school in 1998!

Now, going forward, what are my goals for 2012?

• Reach a gross income of at least $80,000 by the end of 2012;
• Continue to apply for online teaching positions that will help me meet the above goal;
• Continue to throw as much extra money as possible at my student loans, with a very ambitious goal of paying it down to $25,000 by the end of 2012 (I currently owe just under $50K);
• Associated with the above goal, make sure that I have a handle on my discretionary spending - in 2011, I made more money, but I also SPENT more money. In other words, i need to keep my eyes on the prize!

So that's it! I am a numbers nerd, so I am having fun with my various spreadsheets, tracking (primarily) my income levels and sources, as well as my debt payments. I see 2012 as a challenge, but one that I'm looking forward to, as it will move me closer to my goal of getting rid of my debt!

I hope you all enjoyed a wonderful holiday and that 2012 brings you much happiness, prosperity, and wisdom!

Infrequent update. . . .

If you're wondering where I've been in the last six months, I picked up another job, which has just about stretched me to the limit. I'm working a LOT but am also making a nice dent in my student loan debt, though I've still got quite a ways to go. Here's where I was the last time I checked in with you all:

Debt Reduction Progress
Second Mortgage Debt: $31,400::::$26,257 84%
Student Loan Debt: $61,762::::$56,387 91%
Primary Mortgage Debt: $167,500::::$158,016 94%

And here's where I'm at now (focusing primarily on student loan debt):
Second Mortgage Debt: $31,400::::$25,888 82%
Student Loan Debt: $61,762::::$51,881 84%
Primary Mortgage Debt: $167,500::::$156,757 94%

Little by little, I'm getting there; and since I picked up a new job in late spring/early summer, hopefully my student loan debt will decrease even quicker over the next year. About 20% of my payments are going to service interest only right now, so that's a bit frustrating, but that number will also decrease as my balance goes down.

I have no idea when I'll have a chance to update again, but will try at least every couple of months. . . .

I hope you're all continuing to survive the recession (that supposedly ended two years ago)!

Look to the right. . . .

and you'll see my handy dandy Debt Reduction Progress bar, which I update every month or so. Since I can't figure out how to put the bar into an actual post (why the HTML works in the sidebar but not in my post is a mystery to me. . . .) I wanted to include the current numbers and percentages in this posting so I can look back later and see how far I've come. It seems that each month the percentage of repaid debt falls by just 1%, though my math-muddled mind seems to believe that this will increase more quickly as the debt amounts fall?

So, with that, here are the current numbers:

Second Mortgage Debt: $31,400::::$26,257 (84%)

Student Loan Debt: $61,762::::$56,387 (91%)

Primary Mortgage Debt: $167,500::::$158,016 (94%)

The first number is the original debt amount, the second number is the amount I currently owe. The percentage reflects the percentage of the original debt I still owe. The reason I like the percentages is that when I get demotivated and depressed and discouraged (as happens periodically) I can look back and see that I am actually making some progress, slow though it may be.

Best laid plans. . .

The month of February was shaping up to be a relatively good one, financially. Meaning that I was going to send more of my hard-earned dollars to pay down my student loan and/or my second mortgage.

Then on Friday, I ended up spending over $500 at the vet with a sick cat. After tests and more tests, they still don't know why she was power-vomiting last week. However, after purchasing some really, really expensive food, I think my allergic cat is finally on the mend. Unfortunately, my credit card bill has now expanded to match the frustration I was feeling last week as I cleaned up the floor multiple times.

Sigh.

I know that I did the right thing since my cat is like family. Where's the limit, though? If she were still throwing up (and I don't know yet if we're really out of the woods), I'm sure the veterinarian would have suggested even more expensive tests (an ultrasound was next on the list). I love my cat, but I'm just not sure I'm ready to spend thousands of dollars on tests and treatments that may or may not be helpful.

I've been feeling sorry for myself for several reasons lately, and this last weekend just about sent me over the edge. Then this morning I listened to an incredibly upbeat woman on the Max (yes, I eavesdrop regularly) talking to an acquaintance about how she's been 'clean' (i.e. off drugs) for six months, she has a job, she has a house, she's taking care of a family member, and she's trying to get her child back. And it hit me that even though I'm feeling overworked and underpaid and like I just don't have enough time for fun, my life is fairly cushy. I have four jobs. I can pay all of my bills and then some. I'm healthy. I can afford to pay $500 at the veterinarian because I still have an emergency fund.

Time to stop whining.

Finally back. . .

Sheesh! Being sick just about knocked me flat! And, unfortunately, sapped some of the motivation and joie de vivre from my life. I don't know if it's because I'm coming off of an exhausting cold and am not yet feeling 100% again, or if I need to readjust my work life (and debt repayment plans), but I feel as if my debt payments are just a drop in the bucket.

When will I start to see a real difference in my student loan debt? Granted, it's a huge balance (in my own mind, anyway) and it IS going to take awhile, maybe longer than I originally planned. At the beginning of January, my balance was $59,689. After sending about $1,000 to the U.S. government last month, the balance is now just above $59,000. All that interest is killing me!!

Of course, at least I'm making payments, right? I'm not just ignoring the fact that the interest is accruing and digging me deeper in debt, as I did for the ten years after I graduated. You have to start somewhere, I suppose, but perhaps my 'plan' is a little bit too optimistic, given that I need some time to relax, socialize, sleep, and importantly, exercise.

I am hoping to have my gung-ho motivation back by the end of February, if not sooner. Until then, I'm going to keep plugging away and start thinking about how I can rearrange my work schedule(s) so I'm not overwhelmed. . . .

And then there's this. . . .

For pete's sake, can we get some good news over here?????

Frugal doubt. . . .

I sort of knew this was coming. Inevitably at some point after I've made a decision I start to question myself. In this case, I'm questioning whether I should pay off my second mortgage first, or wait on that and pay towards my student loan instead.

I keep thinking that I may be throwing good money after bad by paying down my second mortgage. After all, if (and this is a big IF) the housing market ever recovers (or just stops resulting in decreasing value) then I may be able to sell my house without creating equity by paying off my second mortgage debt. Right? Here's what I read in a recent US News article about who will continue to struggle in 2011:

Homeowners. Americans have lost about $9 trillion worth of household wealth since 2007, largely because of falling home values. The rout isn't over, unfortunately. Most forecasters think home values will decline another 5 to 10 percent in 2011, as high unemployment causes more foreclosures and a glut of homes pushes prices down. The good news, if there is any, is that the housing market may finally hit bottom in 2011, with home values stabilizing after five years of declines. That doesn't mean home prices will shoot up any time soon. But once buyers believe that prices have stopped falling, they'll be more inclined to buy, the first step back toward a healthy housing market. Stabilizing home values will also help owners do better financial planning, since they'll have a firm idea what their home is worth.

Sigh.

Meanwhile, I could be working on that student loan, almost half of which may be paid off by the generous gift of a family member. Meaning that I could, potentially, have my student loan paid off by mid-2012. At which time I may be able to sell my house and just break even. Right?

Or is this just a case of 'six of one, half-dozen of the other'?

Student loan shenanigans. . . .

A few weeks ago, I mentioned that there might be a change in my student loan balance due to an inheritance (of sorts) that a close relative received. Actually, the 'close relative' is my father. Many (many) years ago when I was making some bad decisions in high school, my dad said, quote: "you get into college, and we'll find a way to pay for it". What I didn't realize at the time was that this meant students loans - for me.

After my first graduate degree was finished, my dad commented that when he received an expected inheritance, he would help me with my student loan balance (which was around $50,000 at that time). Over the years since then, I've not counted on that happening, for various reasons. One of those reasons is that I consider these loans to be 'mine', and therefore my responsibility to pay off.

However, just recently, my dad started the conversation again about how he could help me with my student loan balance. The scheme he's come up with has its merits and its downsides. Basically, he will transfer some stock to me equal to about half the balance of my current student loans. Then it will be my decision whether to sell that stock immediately (taking a capital gains tax hit), or to hold the stock with the assumption that the shares will 'split' as they've done in the past (this is stock from a major U.S. company) and will eventually - in who knows how many years - be worth much more.

The merits of this plan are that at a minimum, I'll have about $25,000 to pay down my student loan balance if I'm willing to sell the stock immediately and take the tax hit. The downside? Knowing whether to sell right away or wait and see what happens with this stock. If I wait for the stock to split (and there's no guarantee that this will happen soon, though it looks like a possibility given the direction the stock is heading) and ultimately gain value again, I could have more of my balance paid off than if I were to sell right away.

What a conundrum! Looks like I've got some thinking (and learning) to do! In the meantime, I'm going to continue working on my second mortgage debt while paying at least the interest (but probably a little more than that) on my student loan balance.

In the beginning. . . .

Here's just a wee bit of graphic evidence that my newest battle against debt has begun in earnest! I hope to update this sweet little chart each month as I receive my statements, so I have a visual reminder of why it is I'm working so hard - and will be for at least the next year.


This is a rather small graphic; I believe if you click on it you can see a much larger version, though there isn't a lot of detail at this point. Two months in and I can already see the blue lines decreasing like tiny stairs descending towards workload sanity and financial freedom!

Digital motivator. . . .

When I graduated last spring, I splurged (well, $100 to start and about $70 a month thereafter) on a 'Smartphone' with which I can surf the Internet, check email, listen to podcasts, text, and oh, of course, talk. It's an extra expense that I don't necessarily need, but I wanted to reward myself for completing my program (without additional debt!) and it definitely keeps me sane on my 45 minute lightrail commute each morning and afternoon!

One of the bazillions of things you can download onto the phone is a 'Countdown Widget', which I used to create a clock counting down the days until my second mortgage is paid off. I'm estimating that by the beginning of March, 2012 I'll either have that baby paid off or will be very, very close to it.

Here's (essentially) what it looks like:

Neat, huh? I'm a spreadsheet nerd; I'm constantly playing around with different debt payoff scenarios. This little widget helps me to see the 'light' at the end of the tunnel as I pack my days (and nights) with more and more part-time work that adds to the coffers. It'll be nice to see this number get smaller, and smaller, and smaller the closer I get to my goal. Maybe once I'm down to a year or less I'll add the widget to the sidebar so you can all follow along with me!

Satisfaction. . . .

In November, I sent a grand total of $1,452 to my second mortgage holder, which is $1,197 more than I usually pay each month. There's definitely some satisfaction in watching my balance decrease, since up until now I've been primarily paying interest-only (I wasn't aware that this was akin to an interest-only loan when I signed the papers, by the way, though if I'd been a smarter consumer I would have learned that beforehand).

What amazes me is that in the four years that I've had this loan, I've managed to pay it down by just around $1,500. I'm flabbergasted by this.

October, 2006 starting balance: $31,400
November 2008 balance: $30,877.76
November 2010 balance: $29,881.18*

* Note: this doesn't reflect all the payments that I made in November, since some of my paychecks came late in the month.

Know what's even crazier? My November 2010 balance reflects an additional $400 in principle payments that month! So, essentially, the balance of my second mortgage has only decreased by about $1100 in four years of making regular payments!

With financing like this, it's no wonder some American homeowners are in such deep doo-doo. Loans like this remind me of indentured servitude, in which a peasant was obligated to a wealthy landowner (or other wealthy individual) until he died, because the value of his work on the land (which he didn't own) was never enough to cover the amount of his debt to the aforementioned landowner.

Anyway, this is just a rather long-winded way of saying that the satisfaction of finally watching the balance of this evil loan shrink is hard to describe. Perhaps it's akin to watching the pounds on the scale vanish with weight loss, or, conversely, watching the balance of a savings account grow exponentially. In short, it's FANTASTIC!!

In defense of the beater. . . .

I drive a 15 year old car with almost 115,000 miles on it. Hey, it runs (mostly)! I did just replace the battery, it has regular oil changes, and it's definitely due for a tuneup, but it gets me where I want to go. In addition, it's basically free (minus the $80 or so a month for insurance and gas). And for someone who is bent on paying off old debt, that is a good thing!

I do go kind of crazy from time to time wondering about all of the knocks, creaks, and bumps that my car emits while driving. My mind immediately starts adding up the cost of a new alternator, or clutch, or brakes, or any number of crucial auto functions that might need to be fixed in the next few years (I do have the money in my emergency fund for these sorts of repairs, by the way, though I would love to have the extra room in my budget for a 'repair and maintenance fund').

This month, I was convinced that my gas gauge wasn't working. My speedometer and tachomoter haven't worked in years (you get used to it, believe me!) and I've always said that as long as I know how much gas I have left, I'm content to leave those issues alone, since the instrument cluster alone could cost up to $150 to replace, not including labor costs.

I usually spend about $35 to fill up my tank at the end of the month, and with normal driving to the transit station and the grocery store and to my teaching gigs (when the Max isn't convenient), I'm usually left with just a little more than an empty tank at the end of the month. Well, for the last two weeks my gas gauge has been on half-full. No matter where I drove, and for how long, that gauge didn't budge one little iota. Which freaked me out. I've only been stuck once with an empty gas tank, and I didn't like it one bit; I had no interest in repeating that particular fiasco!

So last Sunday, I went to the gas station and got a fill-up, although the gauge still sat at half full just as it has for weeks. And guess what? I only spent $20 and got 7 gallons of gas! Meaning that my gas gauge isn't actually broken, I've just (somehow) driven less this month than I thought I had! Eureka!

I mentally saved myself $400-500 dollars just by putting $20 into the tank! I do wish for a shiny new car now and then, but the value of getting by with my beater might be equal to $90,000 (my remaining debt) when all is said and done.

A blast from the past. . .

My current flash drive is full, so I'm moving some school stuff over to another drive that I own, and discovered an Excel spreadsheet showing my credit debt in 2005 (see below). As you can see, I owed almost $25,000 total; and I made less than $40,000 a year. I paid all of this off when I sold my first house (back in the days when homes had equity - sigh).

Of course, I immediately started running up NEW credit card debt after moving and buying another house. But it's interesting to see just how much I owed - for STUPID stuff. I have no idea what I bought at Mervyns (which doesn't even exist anymore) or the Gap (I owed over $1,000!!!! That is INSANE).

By the time I finally came to my senses a few years ago, I think I owed almost $5,000 again - these days if I run higher than $300 or $400 on my credit card from month to month I start getting antsy.

I guess the lesson to me in finding this old accounting of my credit debt is really that I have little to nothing to show for all of that debt. I have my car, which accounted for $4,000 of the $25,000, and a computer which is outdated and rife with computer viruses (and therefore unusable). And that's about it. So the next time I 'have' to have that little item, or those shoes, or that t-shirt, I hope I'll consider all the money I've already wasted in my lifetime on frivolous items. Maybe when I've paid off my student loans and at least my second mortgage (waaaaaay in the future) I can do some frivolous shopping (with cash), but until then I've got to get 'gazelle intense', as Dave Ramsey would say.

How Americans are saving money. . . .

I came across this Business Week video entitled Frugal America, which is basically an interview with a family that used to be $800 in the hole each month (thanks to a home equity line of credit, apparently). After a few cruises, yearly trips to Disneyland, and countless restaurant meals, they found themselves over $100,000 in debt! This video details what they did to get themselves out of debt and more importantly, how they learned frugal new habits that will hopefully keep them out of debt!

It's interesting that by the end, the interviewer is comparing the increasingly frugal habits of contemporary Americans to the way their grandparents lived during the Depression. Will we revert to our old super-consumer ways when the recession finally lifts? Only time will tell!

Credit use decreasing. . . .

So is household worth, unfortunately! According to this CNN article, Americans owe less to banks than they ever have! Here's some text:

The government reported Thursday that household debt in the third quarter fell for the first time ever. Meanwhile, net worth dropped by the largest amount on record based on data going back to 1951.

While the fact that household worth has dropped isn't surprising, given the way homes have continued to drop in value, I am a bit curious about the decrease in credit use. I would have assumed that as people lost jobs or had their employment drop to part time, they would be more likely to pay for necessities like food and gas with credit. It appears that this is not the case, primarily because lenders are beginning to take a closer look at how much they're lending, and to whom.

As in previous articles discussing the use of credit by Americans, this one also communicates a barely disguised dismay at the fact that Americans are "spending less". This is because the economy as we know it is highly reliant on our purchase of assorted doo-dads of greater or lesser value, which are designed to wear out quickly so that we are forced to purchase replacement doo-dads.

As I've said before, this notion that Americans need to spend more to keep the economy moving is highly suspect! Why would our government and/or knowledgeable economists want Americans to use money that they don't have? It seems as if (as we're currently experiencing), building an economy on 'credit' creates a house of cards---if just a few cards at the bottom of the house are knocked out, we all come tumbling down. It's as if the people who make decisions at the very top of our economic structure want us to be a nation of serfs, ever more dependent on our 'feudal lords', the credit companies.

That is no life for me. I will continue to save money, spend it on needs (and some wants, within reason), and eventually gain financial independence from lifelong serfdom in the Land of Easy Credit.

Frugal exercise, part deux. . . .

I've been largely silent over the past several days, primarily because the thought of logging in and viewing that gigantic number that represents my student loan debt makes me kind of sick. However, I guess the first step to conquering any obstacle is actually facing it, making peace with it, and studying it to determine how best to get past it. That will be a long process, I know, and my student loan debt won't be something that will go away in a month, or a year, or even probably five years.

In the meantime, I need to keep adding to my savings (which will carry me through next year when I won't be able to work full time, due to school commitments) and keeping my expenditures low.

A few months ago, I wrote about my need for more exercise---as the days have gotten shorter (and darker and less sunny), that need has just become much greater! I often hibernate in the winter, and this year is no exception. I've not motivated myself to get exercise DVD's out of the library, and running outside has been spotty at best. For that reason, I decided to renew my membership to the gym---although I did it frugally: I waited until the gym had a 'no initiation fee' special, saving me $50! So, after a year of frugality, I'm adding a regular, $30 expense back into my budget. I feel like my health (and my mood) requires this.

To offset this, I'm going to try to decrease the amount I'm spending on groceries, as this number as inched past $125 over the last few months, as I've waited to tally my expenditures until the end of the month, rather than keeping track as I go along. Maybe I'll start publishing my budget again, to keep myself a bit more accountable. Did any of you find that interesting, at all? If so, perhaps I'll start that again as of January 1.

Ouch.

Well, I did it. I logged into my SallieMae account (I had to create a new password, it had been so long). The amount I owe on my student loan is just a bit more than I had anticipated. My indebtedness to the U.S. government is:

$56,915.91

I'm not really sure how to go about tackling this, because it's just so overwhelming to me. Of course, while I'm dithering about, getting another degree (paying for it myself, this time), and generally trying to ignore the elephant in the room, interest is accruing on this bad boy.

In fact, if I were to make the 'required' $437.33 payment for the next 21 years, I would end up paying a total of $112,453.65. Which is simply unacceptable. By my rough calculations, I would have to pay almost $400 a month just to cover the interest payments alone (my consolidated interest rate is at 8.25%, which cannot be changed).

So, I'm trying not to cry at this point. I know, deep down, that this is just going to take a degree of creativity (and lots and lots of time), as well as some major changes in terms of my income and my expenditures.

Right after I go out and buy and devour a bar of organic chocolate, I think I need to spend some time searching the blogosphere for those motivating success stories, from 'real people' like me who overcame the odds and paid off similar (and even larger) debts than mine.

Frugality continued. . . .

Whew! Well, I've reveled in my lack of credit card debt over the past three days, since Thanksgiving. Now, it's time to plan for the future, which is going to require continuing my frugal ways. I do still have that student loan debt, after all. I'm just not sure I'm going to start paying it off yet, for reasons I'll explain below:

In the Fall of 2009---almost a year from now---I'll most likely have to drop to 75% of full time at my day job, to account for an unpaid practicum experience that is required in my graduate program. I'll probably need two full days during the week for the entire academic year (2009-2010) to take care of this requirement. Which means, of course, that my income will plummet during that year. I've been avoiding thinking about this complication, because I really wasn't sure how I was going to be able to pay my mortgage and eat with a decreased income. However, now that I'm credit card debt-free, I feel like anything is possible!

Here's what I'm currently thinking I'll do to prepare for this. I'm going to try, starting on January 1, to live on just my salary from the day job. Then I can 'bank' the earnings from my night job, which will allow me to dip into that savings during the year that I can't work a full time paid job during the day. This is going to require some very creative budgeting, especially since I would like to now send 15% of my earnings into my 403(b) plan, since I dropped it to 1% while I was in debt-repayment mode.

Anyway, all of this means that my student loan debt repayment will most likely need to be put on hold, which bums me out. A commenter a few weeks ago mentioned her own student loan debt struggle, and it motivated me to start thinking about getting rid of this debt. At this point, I can't even bring myself to look at my account, to see how much I owe (last time I checked I think it was about $55K). I'm scared to know. That's how bad it is.

Who knows? Maybe the economy will miraculously recover in time for me to sell my house next summer, and this will all be moot. Then I could send that savings straight to my student loan, and really get started on becoming truly debt free! I'm not holding my breath on the economy, though. . . .

As you can see, this 'plan' is a bit of a work in progress; I admit that I haven't even really worked the numbers out yet with my zero based budget spreadsheet, nor have I made the change to my retirement savings. My objective this week is to get all of this worked out, so I can start the New Year with a new financial goal.